640 F. App'x 302
5th Cir.2016Background
- After Hurricane Katrina (late 2005) Farmer and other subcontractors performed FEMA-funded debris-removal work in St. Bernard Parish and alleged they were extorted to pay "protection money."
- Farmer reported the scheme to the FBI in June 2006, became a confidential informant, and delayed civil suit at the FBI's suggestion while cooperating with the investigation.
- The FBI investigation closed in October 2010 with no indictments; Farmer retained counsel in early 2011 and collected FBI records afterward.
- Plaintiffs filed a civil RICO and Louisiana Racketeering Act suit on July 30, 2012, more than four years after the June 2006 accrual date for RICO claims.
- Defendants moved to dismiss as time barred; the district court treated the motions as for summary judgment, granted them, and denied equitable tolling. Plaintiffs appealed.
- The Fifth Circuit affirmed, finding no abuse of discretion in denying equitable tolling because Plaintiffs were not diligent and no extraordinary, external obstacle prevented timely filing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether civil RICO claims are equitably tolled because Farmer delayed filing while cooperating with FBI | Farmer exercised "investigative diligence" by reporting to and cooperating with the FBI, so tolling is warranted | No tolling: plaintiffs failed to act diligently and were not prevented by an extraordinary external obstacle | Denied equitable tolling; district court affirmed |
| Whether FBI advice not to file constituted an extraordinary circumstance preventing timely filing | Reliance on FBI advice equates to government-led impediment justifying tolling | FBI advice was not a legal bar; it was nonbinding and did not actively prevent filing | Reliance on mistaken FBI advice is not an extraordinary circumstance; tolling denied |
| Whether fraudulent concealment or analogous tolling principles (e.g., Klehr) apply | Klehr supports tolling where plaintiffs diligently investigated via cooperating with FBI | Klehr addresses fraudulent concealment by defendants, not this voluntary investigation by plaintiff | Klehr is inapplicable; no allegation of defendant concealment, so no tolling on that basis |
| Whether RICO's remedial purpose justifies broad tolling | RICO's remedial goals warrant flexible tolling to avoid undermining the statute's purpose | Equitable tolling is a narrow doctrine and cannot be expanded solely by remedial aims | Court refused to expand tolling based on remedial purpose alone |
Key Cases Cited
- Granger v. Aaron’s, Inc., 636 F.3d 708 (5th Cir. 2011) (equitable tolling is fact-specific and reviewed for abuse of discretion)
- United States v. Caldwell, 586 F.3d 338 (5th Cir. 2009) (abuse of discretion where decision rests on erroneous evidence assessment)
- Lambert v. United States, 44 F.3d 296 (5th Cir. 1995) (equitable tolling preserves claims when strict limitations application is inequitable)
- Burnett v. New York Central R.R. Co., 380 U.S. 424 (1965) (equitable tolling doctrine principles)
- Hallstrom v. Tillamook County, 493 U.S. 20 (1989) (statutes of limitations are traditionally subject to equitable tolling)
- Irwin v. Department of Veterans Affairs, 498 U.S. 89 (1990) (time requirements between private litigants are customarily subject to equitable tolling)
- Rotella v. Wood, 528 U.S. 549 (2000) (civil RICO claims may be subject to equitable tolling)
- Rashidi v. American President Lines, 96 F.3d 124 (5th Cir. 1996) (equitable tolling applies mainly where plaintiff is actively misled or prevented in an extraordinary way)
- National R.R. Passenger Corp. v. Morgan, 536 U.S. 101 (2002) (equitable doctrines applied sparingly to limitations rules)
- Klehr v. A.O. Smith Corp., 521 U.S. 179 (1997) (fraudulent concealment tolling requires affirmative defendant acts and plaintiff diligence)
- Pace v. DiGuglielmo, 544 U.S. 408 (2005) (equitable tolling denied where requisite diligence is not shown)
- Phillips v. Leggett & Platt, Inc., 658 F.3d 452 (5th Cir. 2011) (reiterating that equitable tolling is a narrow exception)